Reporter 456, 9 October 2000

Minimum wage not to blame

Last year’s introduction of the national minimum wage had only a minimal impact on employment in West Yorkshire’s textiles and clothing industry, two Leeds researchers have found – despite the misgivings voiced in advance by some business leaders.

Dr Jason Heyes of the Business School and Dr Alexandra Gray of the School of Textile Industries surveyed senior managers in 168 manufacturers in the West Riding to assess the impact of last April’s £3.60 ‘safety net’ legislation.

They found that workers had received a pay increase because of the minimum wage in almost half of the clothing firms and nearly a third of the textile manufacturers. Those most likely to have seen their pay packets boosted were hourly-paid women workers.

Of the firms that did award a pay rise, two-thirds said they had not reduced the number of people on the payroll. There were subsequent redundancies in half of the affected clothing firms and 15 per cent of those in textiles.

However, fewer than one in ten of the employers listed the minimum wage as the chief influence on employment.

The companies saw declining demand as by far the main factor in job losses. The not unrelated issue of exchange rates – making imports much cheaper than British-made goods – was the second cause cited.

For clothing firms, pressure from major customers was twice as likely to cost jobs as the minimum wage.

One hard-pressed manager in a menswear firm told the authors: "The industry’s been wiped off its feet, but it’s not down to the national minimum wage."

The survey, funded by the Low Pay Commission, will feature in the School of Geography’s Regional Review.

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